Michelangelo Rossi

Quality Disclosures and Disappointment: Evidence from the Academy Awards

In this paper, Michelangelo Rossi studies the impact of quality disclosures on buyers’ ratings using data from an online recommender system. Disclosures may alter expectations on sellers’ quality and affect buyers’ rating behavior. In particular, if buyers’ utility depends on their expectations, a positive disclosure of quality such as an award may lead to buyers’ disappointment with a negative influence on their ratings. Mr. Rossi identifies the disappointment effect in moviegoers’ ratings originated from the rise in expectations due to movies’ nominations for the Academy of Motion Picture Arts and Sciences awards. He controls for the selection of moviegoers who watch and rate movies before or after nominations with a non-parametric matching technique. After nominations, ratings for nominated movies significantly drop relative to ratings for movies that were not nominated. Disappointment reduces the rating premium of nominated movies by more than five percent in the next thirty days after the nomination.

Mr. Rossi’s research interests lie in the fields of Digitization and Industrial Organization. He authored the chapter on “Asymmetric Information and Review Systems: The Challenge of Digital Platforms”, in the book: Economic Analysis of the Digital Revolution, edited by J. J. Ganuza and G. Llobet, Fundación de los Bancos y Cajas de CECA, 2018.

Michelangelo Rossi is an Assistant Professor in Digital Economics at Télécom Paris, Institut Polytechnique de Paris. He holds a BS in Economics from the University of Pisa, an MS in Economics from the University of Pisa and Sant’Anna School of Economics, as well as an MA in Economic Analysis and a PhD in Economics from the Universidad Carlos III de Madrid.